Consumer spending rises, fueled by new oil money

Consumer spending is up since the Great Recession, with oil states like North Dakota leading the way. New drilling techniques have opened up vast swaths of new oil and gas, helping to drive consumer spending.

By
Christopher S. Rugaber, Associated Press /
August 7, 2014

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A man demonstrates how an oil sample is taken at a drilling rig site outside of Williston, N.D. North Dakota has boomed in large part because of a breakthrough drilling technique, known as hydraulic fracturing, or 'fracking,' that has unlocked vast oil and gas reserves.

Shannon Stapleton/Reuters/File

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WASHINGTON

Consumer spending has soared since the Great Recession ended five years ago in U.S. states with oil and gas drilling booms and has lagged in states hit especially hard by the housing bust.

The figures come from a new annual report the government issued Thursday that for the first time reveals consumer spending on a state-by-state basis. The numbers point to substantial shifts in the economy since the recession ended.

By contrast, spending eked out a scant 3.5 percent increase in Nevada, the weakest for any state and far below the 10.7 percent national average. Arizona's 6.2 percent increase was next-weakest. Home values plummeted in both states once the housing bust hit in 2006.

The changes in spending patterns in North Dakota have been particularly dramatic. Its per-capita spending in 2007, before the recession began, was $32,780. That ranked it 24th among states. By 2012, the figure was $44,029, fourth-highest nationwide. (The figures aren't adjusted for inflation.)

North Dakota has boomed in large part because of a breakthrough drilling technique, known as hydraulic fracturing, or "fracking," that has unlocked vast oil and gas reserves. The state's per-person income soared 16.2 percent, before inflation, from 2011 to 2012, by far the most for any state.

The report points to wide spending disparities elsewhere in the country. Per-person spending in 2012 was highest in Washington, D.C., at $59,423, followed by Massachusetts at $47,308. Spending was lowest that year in Mississippi, at $27,406. Arkansas was the second-lowest, at $28,366.

The size of the disparities has changed little in the past decade.

The government's report includes figures for specific spending categories. For example, consumers spent the most on housing and utilities in Washington, D.C., where per-capita spending reached $11,985, followed by Hawaii at $10,002.